Definition Mental Models
Mental models are frameworks or concepts that help us understand and interpret the world. They shape how we think, make decisions, and solve problems. By collecting and applying a variety of mental models, we can improve our reasoning and avoid cognitive biases.
Why Mental Models Matter
- They simplify complex reality
- Help in decision-making
- Aid in problem-solving
- Prevent common thinking errors
Charlie Munger is famous for advocating the use of a broad set of mental models to achieve better outcomes in life and business. See Charlie Munger.
Examples of Mental Models
- First Principles Thinking
- Second-Order Thinking
- Inversion
- Circle of Competence
- Opportunity Cost
- Confirmation Bias
- Occam’s Razor
- Probabilistic Thinking